How Capitalism Can Thrive in a Transparent World

What will be the biggest challenge to capitalism in the next two decades—and what should be done about it?

NOREENA HERTZ: The coming decades will be ones of super-transparency. A time when anyone, anywhere, any place will be able to be a breaking news journalist. When we all will be paparazzi and all will potentially be paparazzi’s prey.

This is already an age not only of Wikipedia but also of WikiLeaks. In which the World Bank recently issued an “Integrity App” whereby people can upload concerns about corruption, and environmental or human-rights abuses at World Bank Finance projects. In which consumers can determine under what conditions a product was made and its environmental impact, by scanning its bar code using the “Good Guide App.”

If this is where we are today, just imagine where we will be in 20 years’ time.

For capitalism, in its current form, this will pose a serious challenge. Because the more there is nowhere to hide and the more all-seeing consumers and citizens are, the more apparent it will be just how far capitalism has moved away from the ideals of Adam Smith, who saw the market and morality as inexorably linked. Increasingly laid bare too will be just how great the chasm is becoming between those at the top and those at the bottom–a gap which already today is redolent of the 1920s.

In order to head off an escalation of anticapitalist sentiment and a state of perpetual protest, governments and corporations will need to commit to making capitalism a more inclusive system, which means addressing its current short-termist ethos and also its redistributive failings.